Worcester man pleads guilty in tax check scheme

WORCESTER — A Worcester man accused of using the Social Security numbers of Puerto Rico residents to steal government cash pleaded guilty in federal court last week.

Oscar Demota of 11 Good Harbor Drive pleaded guilty in U.S. District Court to a charge of theft of public money. He is scheduled to be sentenced in November.

Mr. Demota was one of two city residents accused in federal records of using those Social Security numbers to file phony income tax returns.

The second person, identified as Nancy Hernandez, also of 11 Good Harbor Drive, has already pleaded guilty to similar charges. She is scheduled to be sentenced in October.

The case also involved local bank workers who have also pleaded guilty to their involvement in the scheme and will be sentenced in federal court. Those bank workers are accused of helping cash the fraudulently obtained checks.

One of the bank employees involved in the scheme is listed as Danielle Pazi, a Worcester woman who formerly worked at Citizens Bank.

She told investigators that Mr. Demota allegedly approached her in November 2011 and asked her if she could cash tax return checks, according to an affidavit written by Joshua Stasio, a special agent with the U.S. Internal Revenue Service.

Ms. Pazi cashed numerous checks for Mr. Demota and in exchange received money for her help, records said. She was eventually fired for her involvement, documents say.

In January, Mr. Demota approached Ms. Pazi again and asked her to cash checks even though she no longer worked at a bank. Ms. Pazi decided at that point to cooperate with authorities.

Investigators began working with Ms. Pazi as she received checks from Mr. Demota that she was asked to cash. Authorities determined the names on the checks were people who lived in Puerto Rico, and that tax returns filed under those names were fraudulent.

The defendants said their supplier of the information was in New York and traveled to Puerto Rico to get Social Security numbers from people there.

Eventually an undercover agent was brought in to help with the sting. Ms. Hernandez and Mr. Demota showed the undercover agent a list of 110 names, dates of birth and Social Security numbers they used to file tax returns.

Ms. Hernandez asked the undercover agent to create bank accounts to receive wire transfers. The undercover agent was to be supplied with employee identification numbers to open business bank accounts. Ms. Hernandez allegedly said $100,000 would be wire transferred into the accounts from Africa.

Investigators tried to determine the sources of the money from Africa. Mr. Demota set up a conference call with a man named "Bobby." That man allegedly told the undercover agent he did not know where the money came from.

The agent was trying to discover if the money transferred from Africa was from drugs or used to fund terrorism, according to court documents.

The documents do not indicate whether authorities ever determined the source of the money.